U.S. Stocks Rise, Buoyed by Gains in Telecoms and Financial Firms
13 December 2017 - 7:15AM
Dow Jones News
By Michael Wursthorn and David Hodari
-- U.S. stocks rise, led by financials, telecoms
-- European shares move higher, while Asia slides
-- Investors look to central banks
Shares of banks and other financial firms surged Tuesday,
putting the Dow Jones Industrial Average and the S&P 500 on
track to notch another set of record closes.
Bank stocks have been rallying in recent weeks as Republicans in
the House and Senate work to complete a sweeping tax overhaul this
year. Rising government bond yields, which tend to boost bank
profits, gave shares of financial firms an added lift ahead of the
Federal Reserve's expected interest-rate increase on Wednesday.
"Everything right now comes down to policy," said Eric Wiegand,
senior portfolio manager U.S. Bank Private Wealth Management.
"We'll be watching what [Fed Chairwoman Janet] Yellen might say at
her last press conference and any insights going forward. The other
fixation in Washington is on the tax bill," he added, saying that
he and other investors are "looking for any signs of negotiations
advancing."
The Dow industrials rose 154 points, or 0.6%, to 24540 in recent
trading, while the S&P 500 gained 0.3%. Both indexes were
trading above their closing highs. The Nasdaq Composite fell
0.1%.
Goldman Sachs Group added 3.2%, making it one of the biggest
contributors to the Dow's point gain. J.P. Morgan Chase & Co.
also rose 1.6%.
The yield on the benchmark 10-year U.S. Treasury bond gained to
2.401%, according to Tradeweb, from 2.387% on Monday.
Shares of financial stocks in the S&P 500 are up 9.2% so far
this quarter, making it the best-performing sector of the broad
index's 11 major categories.
A mix of corporate news also pushed telecommunications firms
higher. That helped both the Dow and the S&P 500 overcome
weaknesses among tech and energy stocks.
Shares of Comcast advanced 1.9% after the cable and programming
firm said it was no longer pursuing an acquisition of media and
entertainment assets from 21st Century Fox.
Meanwhile, Walt Disney's talks to acquire assets from 21st
Century Fox continued and a deal could be announced as soon this
week, The Wall Street Journal reported. Shares of 21st Century Fox,
which shares common ownership with Wall Street Journal parent News
Corp, rose 1.2%, while Disney gained 0.2%.
Verizon also got a boost after it said it struck a deal to show
NFL football games on its mobile network, as well as Yahoo and its
other platforms. Verizon shares climbed 2.5% in recent trading.
Boeing, a big contributor to the Dow's gains this year, climbed
another 2.8%, after the aerospace giant said it would boost its
quarterly dividend by 20% and raise its buyback authorization to
$18 billion.
Tuesday marked the start of the Federal Open Market Committee's
two-day meeting, with the panel's interest-rate decision due
Wednesday. Data from CME Group showed investors were betting on a
100% probability that the Fed will announce a rate increase.
Fed observers shouldn't expect many surprises in the months
ahead, said Mark Richards, a global multiasset strategist at J.P.
Morgan Asset & Wealth Management. December's meeting will be
the last for multiple FOMC members, and given an impending change
at the helm in January, "it doesn't feel like a new Fed chair will
seek to alter the policy path materially, so we expect [the current
guidance of three increases] to be maintained for a good few
months."
Elsewhere, the Stoxx Europe 600 rose 0.7%, while most indexes in
Asia ended the session lower.
Hong Kong's Hang Seng Index fell 0.6%, dragged lower by
heavyweight Tencent Holdings. The tech company fell 3% after
disclosing that one of its units is in talks to acquire a minority
stake in supermarket operator Yonghui.
South Korea's Kospi slipped 0.4%, despite a 0.6% gain for index
heavyweight Samsung Electronics. Japan's Nikkei closed 0.3% lower,
partly due to a slight drop in the yen against the dollar.
Regional selling also weighed on Chinese stocks, with the
Shanghai Composite down 1.3%.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and
David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
December 12, 2017 15:00 ET (20:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.